Second proxy advisor urges no to T-Mobile-MetroPCS
Proxy advisor Glass Lewis recommends voting 'No' on T-Mobile-MetroPCS deal, joins ISS
NEW YORK (AP) -- Proxy advisor Glass Lewis says shareholders of cellphone carrier MetroPCS Communications Inc. should vote against the company's merger with larger rival T-Mobile USA because the offer undervalues the company.
Institutional Shareholder Services, another influential advisory firm, published a similar recommendation on Wednesday. That prompted a rise in MetroPCS share price, as investors started to anticipate a sweetened deal. The stock market was closed Friday.
A third firm, Egan Jones, supports the deal as is.
In the recommendation published Thursday, Glass Lewis said Dallas-based MetroPCS locked itself into the deal with T-Mobile too early, and hasn't sufficiently explored alternatives.
Under the deal, T-Mobile USA's parent company, Deutsche Telekom AG of Germany, will hold a 74 percent stake in the combined company, while MetroPCS shareholders will own the remainder and receive a special dividend of $1.5 billion.
Shareholders are set to vote on the deal on April 12. Two major hedge funds have come out against the deal, while another supports it.
MetroPCS didn't have an immediate response to Glass Lewis' recommendation. In its rebuttal to the ISS report, it said the deal offers "compelling benefits."
T-Mobile USA is the country's fourth-largest cellphone carrier, with 33.4 million devices on its network, while MetroPCS is the fifth-largest, with 8.9 million.
